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Keep Your Wheels Turning: New Insurance Options for Bicyclists

by Scott

This is an expanded version of the article that appeared in the September/October 2012 issue of American Bicyclist. We've since heard about another insurance package for cyclists, from Markel Insurance. If you have comments on this article or others from the September/October issue, please send your thoughts to our editor, Carolyn Szczepanski for inclusion in the next issue. Not getting American Bicyclist? It's a membership benefit - join today!

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In my two years as the League’s membership director, I have gotten many questions about insurance for individual cyclists. Until recently, there has been nothing specific for cyclists, and the coverages that apply to cyclists come from a patchwork of different policies that can vary wildly by insurer.

My answer, until recently, has been “contact your insurer, and find out what coverage you have.” So in writing about the new insurance available to cyclists, I began by calling my own insurance agent to find out what coverage applies when I’m on my bike.

My homeowner’s policy is a robust one, offering $500,000 in liability coverage, should I be accused of causing harm to others while biking. I am covered for theft, but my deductible is $500 – which more than I paid for my commuter bike, back in 1994. Not much help there. The agent mentioned that I could schedule my bike under my insurance policy, to get theft coverage with a $0 deductible. Scheduling a bike is costly, however, and my agent knew of only a few cases where riders had scheduled their (expensive, custom) bikes.

Suddenly, there are four different insurance packages coming to market, offering cyclists the opportunity to unify their cycling-related coverage in single cycle-centric policy, and offering different combinations of enhanced medical, accident, liability, and theft /damage coverage.

As you assess whether any of the new policies is right for you, here’s where to look for your existing coverages as a cyclist:

Liability coverage pays for your legal defense and settlement should you be accused of causing injury or damage to property as a result of your on-bike actions. Liability coverage is typically available under homeowners or renters insurance.

Uninsured/underinsured motorist coverage covers your bills if you are injured by a motorist with inadequate insurance. If you have auto insurance, you are covered as a cyclist, according to Bob Mionske. Mionske is a former professional bike racer and Olympian who advised the Spoke Insurance team on the types of coverage cyclists need. He recommends maximizing this coverage under your auto policy, adding that, until now, cyclists without autos have not had access to this type of coverage.

Theft/damage coverage is provided under homeowner’s/renter’s insurance, but the details of that coverage vary wildly from policy to policy and company to company.

Medical coverage – each of the bike-specific policies provides some sort of additional medical benefit, but generally as a supplement to traditional medical coverage, not a replacement.

Claims against any of your existing policies may result in an increase in premiums. In addition to providing supplemental coverage, filing bike-related claims under a bike-specific policy, rather than other existing policies, may protect you from rate increases, according to Craig Dawson of Spoke.

Why now?

Insurance companies are typically risk averse, and don’t like starting new policies without a proven track record with other companies. The new bike specific insurance policies resulted from the work of motivated individuals with deep ties to both the cycling community and the insurance business. Their passion has helped convince insurers of the need and market for these policies.

Here are the basic details of the new bike-specific insurance policies we know about. Please contact the insurers for specific details, limitations, and personalized quotes.

Trip interruption coverage – for expenses if you are stranded due to a breakdown on a trip that exceeds a distance of 100 miles from your residence

Roadside assistance (optional)

Premium is based on value of covered equipment, as well as level of participation in cycling. Liability only, and packages for competitive cyclists are available as well. As of late September, Spoke is available in twelve western states, but is working to expand nationwide – see website for availability.

The Better World Club bills itself as ‘America’s only environmentally friendly auto club.’ Their services have long included an option for cyclists to get roadside assistance, and they have been a promotional partner of the League for years. Now the Better World Club, working with Gales Creek Insurance Services, is adding liability and accident insurance to their bicycle coverage (which is available either in conjunction with an auto membership, or separately.) Better World Club insurance includes:

Accident coverage up to $100,000 (for medical bills, primarily)

Liability coverage, up to $1 million

Roadside assistance

The Better World Club insurance is expected to be part of their bicycle package by late summer, available in all states. There is currently no theft/equipment damage coverage, but this may become available at an extra cost in the future. Bike-only coverage costs $39.95/year for the first rider, and $17 for additional riders in the same household.

Markel has added cycling insurance to their line of coverages for recreational activities (boat, motorcycle, etc.) Their policy allows you to mix and match levels of coverage in the following categories.

Balance insurance was developed by cyclist Jay Paul, who has seen several friends go deeply into debt as a result of serious cycling injuries. Balance pays substantial lump-sum cash benefits – above and beyond all other insurance – in the case of major injury or death. It is a supplement to standard major medical coverage. Balance covers death, dismemberment, paralysis, and traumatic brain injury, and includes a daily payment for hospitalization.

Balance is sold in units of $50,000 worth of coverage. Coverage at the $50,000 level costs $63/year for an individual, and $99/year for a family. As of late September, Balance has approval for sale in 23 states. Check website for availability.